On August 2, 2023, Saba Capital Management, L.P. (Trades, Portfolio), a renowned investment firm, made a significant move in the stock market by acquiring a new stake in Destra Multi-Alternative Fund (DMA, Financial). This article provides an in-depth analysis of the transaction, the profiles of the firm and the traded company, and the potential implications for value investors.
Details of the Transaction
Saba Capital Management, L.P. (Trades, Portfolio) purchased 629,021 shares of Destra Multi-Alternative Fund at a price of $4.92 per share. This transaction had a 0.06% impact on the firm's portfolio, increasing its total holdings in DMA to 629,021 shares, which now represent 0.06% of its portfolio. The firm now holds a 7.00% stake in DMA.
Profile of the Firm
Saba Capital Management, L.P. (Trades, Portfolio), located at 405 Lexington Avenue, New York, NY 10174, is a prominent investment firm with a portfolio of 762 stocks, primarily in the Financial Services and Technology sectors. The firm's top holdings include Templeton Global Income Fund (GIM, Financial), BlackRock Capital Allocation Trust (BCAT, Financial), BlackRock Health Sciences Trust II (BMEZ, Financial), BlackRock Innovation & Growth Tr (BIGZ, Financial), and BlackRock ESG Capital Allocation Trust (ECAT, Financial). The firm manages an equity portfolio valued at $5.24 billion. 
Overview of the Traded Company
Destra Multi-Alternative Fund, a non-diversified, closed-end management investment company, operates as an interval fund with a continuous offering of fund shares. The company, which operates in a single segment, seeks returns from capital appreciation and income, with an emphasis on income generation. As of August 10, 2023, the company's market capitalization stands at $45.623 million, and its stock price is $5.09. The company's GF Score is 21/100, indicating poor future performance potential. 
Analysis of the Traded Stock
Since the transaction, the stock's price has increased by 3.46%, despite a year-to-date decline of 26.66%. The stock's GF Value cannot be evaluated due to insufficient data. The company's Financial Strength and Profitability Rank are 6/10 and 2/10, respectively, while its Growth Rank is 0/10, indicating no growth.
Financial Health of the Traded Company
Destra Multi-Alternative Fund's financial health is a concern, with a negative return on equity (ROE) of -8.23 and a negative return on assets (ROA) of -6.79. The company's cash to debt ratio is not available, and its interest coverage is also not applicable. The company's Altman Z score is 0.00, indicating potential financial distress.
Performance Indicators of the Traded Stock
The stock's RSI 5 Day, RSI 9 Day, and RSI 14 Day values are 59.02, 53.23, and 48.83, respectively. The stock's Momentum Index 6 - 1 Month and Momentum Index 12 - 1 Month values are -26.26 and -29.50, respectively, indicating a negative momentum.
Conclusion
In conclusion, Saba Capital Management, L.P. (Trades, Portfolio)'s acquisition of a new stake in Destra Multi-Alternative Fund is a noteworthy transaction. However, the traded company's poor financial health and negative growth indicators suggest potential risks. Value investors should carefully consider these factors before making investment decisions.
